But as it just begins to look for a new CEO to replace Carol Bartz, already there are major obstacles to finding a new leader.

First off, the board’s preliminary wish list of CEO candidates is so far limited to executives who have already run big Internet companies, sources said, possibly leaving many qualified people from being considered.

Then, at least one person on the preliminary wish list was left feeling Yahoo! was more interested in its separate steering committee search — which is exploring the sale of the company or pieces of the company, among other moves. That left the potential candidate scratching their head wondering what the board’s primary search goal is.

At least one source close to the search said the CEO hunt had taken a back seat to the sale process. Already the banks have the company’s books and are poring over the financials.

“The board is telling people that they don’t know what to do,” said one source. “This thing is broken, and we don’t know how to fix it.”

Also, several of the potential candidates have expressed a number of reservations about taking the reins of the beleaguered Web giant — mainly because of its dysfunctional board, sources said.

“I think they shouldn’t hire a CEO; they should figure out if they’re selling it or not,” said one person involved in the process.

One source said that some of the potential candidates are opposed to working with Yahoo! co-founder Jerry Yang, a major shareholder and on the board.

At an all-hands meeting last week to rally the troops, Yang overshadowed current interim CEO Tim Morse while also declaring the company wasn’t for sale.

On the preliminary CEO wish list are: former DoubleClick CEO Kevin Ryan; Dave Kenny, a Yahoo! board member who once ran digital ad shop Digitas; and Dave Rosenblatt, a former top ad executive at Google.

Kenny is heading the steering committee. The executive search committee head has not yet been named.

Yahoo! Chairman Roy Bostock fired Bartz over the phone this week after she failed to turn around the slumping Internet giant two and a half years into the job.

Shareholders are calling for even more leadership changes at the board level, in particular Bostock.

Meanwhile, the company is exploring all options, including selling off all or parts of the company, taking the company private and forming strategic partnerships.